Val, inside your walls, nailed to the studs are slats of thin wood called lath. When the plaster was put on originally, the first coat of plaster was forced between the lath forming what they call keys to hold the plaster to the walls. As your house has settled over the years, the keys have broken off which allows the bubbles to appear and the cracks to form.
Ed is right and eventually you will have to have the bubbled areas replastered which is expensive and a job for a pro or put up thin drywall which is much less expensive and an easy but messy do-it-yourself project. These are the only ways to fix the bubbles, if you want to make a permanent fix. If you just want a paint job for now, then follow Ed's directions for scraping out and filling the cracks.
Let us know if you decide to do the drywall now and we can give you more tips for this.
If you decide to paint, be sure you wear a good dust mask when prepping the walls. The old paint on the walls probably has lead in it. Any scraping or sanding will let the lead dust lose in the room and you will want to wash everything in the room after scraping or sanding. Yes, this is another reason that the thin drywall is a better way to go.